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Disposal of ELB’s interest in the ELB Flying Services Partnership
ELB GROUP LIMITED
Incorporated in the Republic of South Africa
(Registration number 1930/002553/06)
ISIN: ZAE000035101
JSE Code: ELR
(“ELB” or “the Company”)
DISPOSAL OF ELB’S INTEREST IN THE ELB FLYING SERVICES PARTNERSHIP
1. BACKGROUND AND RATIONALE
The board of directors of ELB (“the Board”) announces that, through its subsidiaries ELB Engineering
Proprietary Limited (“Engineering”) and ELB Engineering Services Proprietary Limited (“Engineering
Services”), the Company, on 11 July 2019, agreed to dispose of its interest in the ELB Flying
Services Partnership (“Partnership”), to be effected through:
a) the disposal by Engineering Services of its 49% interest in the Partnership (“Partnership
Interest”) to Mr AG Fletcher, or his nominee; and
b) the disposal by Engineering of 100% of the issued share capital of ELB Trident Equipment
Proprietary Limited (“Trident”) and related claims (“Trident Shares and Claims”) to Tanjo
Financial Services Proprietary Limited (“Tanjo”),
(collectively, “the Transaction”).
Tanjo is a company controlled by Mr AG Fletcher, the current Chairman of the Board. Trident holds a
2% interest in the Partnership and has no other business activities.
The Partnership is established for the sole and exclusive purpose and object of acquiring, owning,
managing and leasing an aircraft and in the course of the Partnership business to generate rental and
other income for the benefit of the Partners and to carry out all such other activities as may be
necessary or desirable in relation to the aircraft and from the successful operation of the Partnership.
ELB has entered into the Transaction to provide additional working capital.
2. TERMS OF THE TRANSACTION
2.1. Consideration
The consideration payable to Engineering Services for its 49% interest in the Partnership is an
amount of R8,232,000, payable in cash.
The consideration payable to Engineering for the Trident Shares and Claims is an amount of
R336,000, payable in cash.
The total aggregated cash consideration for the Transaction is R8,568,000.
2.2. Independent Expert requirements
The Company is required to procure an opinion from an independent expert acceptable to the
JSE Limited (”JSE”), confirming whether the Transaction is fair as far as shareholders of ELB
are concerned and to provide such confirmation to the JSE in accordance with paragraph
10.7(b) of the JSE Listings Requirements.
2.3. Conditions precedent
There are no material conditions precedent outstanding.
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2.4. Effective date
The effective date of the transaction is 30 June 2019 (“Effective Date”).
2.5. Other significant terms
The agreements giving effect to the Transaction provides Engineering and Engineering
Services with a call option (“the Option”), whereby Engineering and Engineering Services will
have the option of reacquiring the Trident Shares and the Partnership Interest respectively at
any time before 28 February 2020 (“Expiry Date”), for a consideration that will equal the
purchase consideration set out in 2.1 above, plus any further contributions made to the
Partnership between the Effective Date and the Expiry Date, plus interest at the RMB call rate
from time to time.
Other warranties and terms agreed between the parties to the Transaction are standard for a
transaction of this nature.
3. FINANCIAL INFORMATION
The net loss attributable to the partners of the Partnership amounted to R126 494 for the
financial year ended 30 June 2019, and the net assets attributable to the partners equalled
R746 199 as at 30 June 2019, being the last financial year-end of the Partnership. The
Partnership’s financial results are prepared in accordance with the general principles applicable
to partnership accounting, and in particular on the historical cost basis.
The net loss after tax of Trident amounted to R4 183 for the six-month period ended 31
December 2018, and the net assets equalled R91 022 as at 31 December 2018, being the last
interim financial period-end of Trident for which financial results are available. Trident’s financial
results are prepared in accordance with International Financial Reporting Standards.
The above financial information is based on the unaudited management accounts of the
Partnership and Trident, and the Company is satisfied with the quality of the management
accounts.
4. CATEGORISATION
The Transaction constitutes a small related party transaction in terms of the JSE Listings
Requirements.
The Option will be categorised at the time of exercise thereof in accordance with paragraph
9.1(b) of the JSE Listings Requirements.
5. OPINION OF THE INDEPENDENT EXPERT
A further announcement will be made once the requisite opinion for the Independent Expert is
available in accordance with paragraph 10.7(c) of the JSE Listings Requirements.
Rivonia
15 July 2019
Sponsor and Corporate Advisor
Questco Corporate Advisory Proprietary Limited
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Date: 15/07/2019 05:30:00
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